Even as New York and New Jersey launched lawsuits against business that have participated in price gouging post-Sandy, Texas Rep. Ron Paul has penned a newsletter saying that when it comes to gas this practice would have actually solved states’ problems post the storm.

According to Bloomberg, New Jersey government is currently suing seven stations for price gouging. Under New Jersey law, excessive price increase of 10 percent or more during a declared state of emergency is considered price gouging.

“We warned merchants again and again not to violate the law by taking advantage of people following this catastrophe,” said New Jersey Attorney General Jeffrey Chiesa during a press conference on Friday Nov. 9. “The fact that we have these fringe businesses that think that disasters are a profit center is troubling.”

“During emergencies, New Jerseyans should look out for each other – not seek to take advantage of each other. The State Division of Consumer Affairs will look closely at any and all complaints about alleged price gouging. Anyone found to have violated the law will face significant penalties.”

On Nov. 5, New York State Attorney General Eric Schneiderman announced that his office has received overwhelming number of complaints about price gouging and was launching an investigation into the matter, reported Reuters.

“Our office has zero tolerance for price gouging,” he said. “We are actively investigating hundreds of complaints we’ve received from consumers of businesses preying on victims.”

However, the outgoing representative from the Lone Star State, Ron Paul, believes that interfering in price gouging and regulating the prices actually hurt the residents in New Jersey and New York and caused the post-Sandy gas shortage to last longer than it otherwise would.

In the wake of Hurricane Sandy, the supply of gasoline was greatly disrupted. Many gas stations were unable to pump gas due to a lack of electricity, thus greatly reducing the supply. At the same time demand for gasoline spiked due to the widespread use of generators. Because gas stations were forbidden from raising their prices to meet the increased demand, miles-long lines developed and stations were forced to start limiting the amount of gasoline that individuals could purchase. New Jersey gas stations began to look like Soviet grocery stores.

Had gas stations been allowed to raise their prices to reflect the increased demand for gasoline, only those most in need of gasoline would have purchased gas, while everyone would have economized on their existing supply. But because prices remained lower than they should have been, no one sought to conserve gas. Low prices signaled that gas was in abundant supply, while reality was exactly the opposite, and only those fortunate enough to be at the front of gas lines were able to purchase gas before it sold out. Not surprisingly, a thriving black market developed, with gas offered for up to $20 per gallon.